Updater Services, an integrated facilities management firm, initiated its initial public offering (IPO) on Monday. The company aims to raise around Rs 640 crore (Rs 1 crore = $120,316) and the offering will close on September 27. Prior to the launch, Updater Services managed to raise approximately Rs 288 crore from anchor investors including BNP Paribas (OTC:BNPQY), Societe Generale (OTC:SCGLY), Citigroup (NYSE:C) Global Markets, and Nomura Singapore.
The IPO consists of a fresh equity issue of Rs 400 crore and an offer for sale (OFS) of 8 million shares by the promoter and other selling shareholders. The company has set the price band at Rs 280-300 ($1 = Rs 83.1) per share, allowing investors to bid for a minimum of 50 shares in one lot and in multiples thereafter.
The distribution of the offer includes 75% set aside for qualified institutional buyers (QIBs), 15% reserved for non-institutional investors (NIIs) and the remaining 10% for retail investors. The net proceeds will be utilized towards funding working capital requirements, repayment of debt, pursuing inorganic initiatives and other general corporate purposes.
Analysts have expressed mixed views on Updater Services' prospects. Some recommend a long-term subscription while others suggest avoiding the issue due to aggressive pricing. Anand Rathi, a market analyst, commented positively on the company's valuation and recommended a long-term subscription to the IPO. He stated that Updater Services has successfully created a niche with the support of the latest technology in its portfolio. However, Stoxbox advised against subscribing due to an aggressive pricing strategy.
Updater Services is a leading provider of integrated facilities management services and business support services in India with a pan-India presence. The company also offers employee background verification check services through Matrix, which holds a 5.4% market share in this segment in FY23.
For the fiscal year ending March 2023, the company reported a 42% YoY increase in revenue from operations to Rs 2,099 crore. However, net profit fell by 39% to Rs 34.6 crore during the same period.
IIFL Securities, Motilal Oswal, and SBI Capital Markets are serving as book-running lead managers to the issue, while Link Intime India is acting as the registrar.
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